LEE SHUI FOO AND OTHERS v. LI CHUN FUNG

HCA1030/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1030 OF 2006

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REASONS   FOR   DECISION

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Introduction

1.  This action concerns the beneficial ownership of one equal half share in Lot Nos.2279B, 2285, 2267, 3231 and 3232 in D.D.104 registered in the name of the defendant.

2.  The plaintiffs claimed that all along the same vested in Li Tsan Tso (李燦祖), that is, a Tso (祖), an ancestral worship trust of the Li Clan in Chuk Yuen, Yuen Long, New Territories.  Based on such beneficial ownership in the lots, they claimed for various declaratory relief.

3.  The defendant alleged that Li Tsan Tso was a natural person.  The half share of the lots registered in his name was initially owned and registered under the name of his grand-grandfather, Li Mi Fook (李美福).  In February 1982, the same were succeeded by his father, Lee Ping Cheung (李炳昌).  When his father died, he succeeded the same in November 1987.

4.  By order that 31 October 2008, the master entered summary judgment against the defendant.  On 17 February 2009, I dismissed the defendant’s appeal against the master’s order.  These are my reasons.

Discussion

5.  The primary issue before the court is whether Li Tsan Tso is an ancestral Tso or a natural person.

6.  The plaintiff’s case is summarized as follows.

7.  When the lots in question were first acquired, they were registered under the names of Li Tsan Tso and Li Mi Fook.  Li Mi Fook died in or before 1928.  Over the years, various members of the Tso acted as the de facto managers and representatives of the Tso.  In 1982, Lee Kwai Lam (李貴林) and Lee Ping Cheung were elected by the members of the Tso as the managers and representatives to hold the lands for the Tso.  At about the same time, the lots were mistakenly transferred to Lee Kwai Lam and Lee Ping Cheung as tenants in common rather than as trustees or managers of the Tso.  Lee Kwai Lam and Lee Ping Cheung nevertheless held the lots on trust for the Tso.

8.  In 1987, the Government resumed Lot Nos.2279B and 2285.  By assignment dated 28 October 1987, Lee Kwai Lam, pursuant to his earlier promise to rectify the mistaken transfer as aforesaid, assigned his half share in the remaining lots to the defendant and Lee Shui Foo (李水富) as the newly appointed managers of the Tso.  But contrary to his promise, the defendant did not take any step to transfer the half share on the lots registered in his name back to the Tso.

9.  In 2000, the Government resumed portions of Lot Nos.3231 and 3232, leaving Lot Nos.2267, 3231R.P. and 3232R.P.  (It is common ground that the Government had offered to pay compensation for the resumption totaling HK$1,528,565 but withheld the same because of the present action.)  Since then, the defendant continued to hold half of the share in those lots registered in his name as trustee of the Tso.

10.  As I will demonstrate below, the evidence in support of the plaintiff’s case is overwhelming.

11.  The defendant relied heavily on the block crown lease dated 21 May 1900 in which Lot Nos.2267, 2279B, 2285 and 3231 were registered under the names of Li Tsan Tso and Li Mi Fook without any reference that Li Tsan Tso was a Tso or Li Mi Fook was a manager (司理) of the Tso.  He contended that there is at least a triable issue that (a) Li Tsan Tso was a natural person who bore the full name李燦祖 and not a Tso established in memory of the Lis’ focal ancestor李燦; and (b) Li Mi Fook, his grand-grandfather held the half share in the lots for his own beneficial interest, which interest eventually vested in him by way of subsequent successions.

12.  However, against the block crown lease is a wealth of evidence demonstrating clearly that Li Tsan Tso was at all material times and still is a Tso.

13.  First, several contemporaneous title documents described Li Mi Fook as trustee of Li Tsan Tso: see the memorial dated 7 November 1912 for the surrender of crown lease in respect of Lot No.2279, the memorial dated 13 April 1920 for the mortgage of Lot Nos.2267, 2285 and 3231 and the memorial dated 3 August 1921 for the sale of Lot No.3232.  Further, in the Chinese notice for the said mortgage dated 15 March 1920, Li Mi Fook was referred to as司理, that is manager, which on the evidence before me, could only mean that he was the manager of Li Tsan Tso as a Tso.

14.  Second, there are the income and expenditure records of the Tso which dated back as early as民國32 年9 月初9 日, that is 1943, and 1966.  The defendant alleged that he had never seen them before and sought to challenge the authenticity of these documents.  It is a bare allegation without any substance whatsoever.

15.  Third, in the承諾書dated 16 October 1981, Lee Kwai Lam and Lee Ping Cheung (the defendant’s father) acknowledged that they were managers of the Tso; that they would apply to the Yeun Long District Land Office to register themselves as代理人of the Tso’s property; and that they acknowledged that the Tso’s property did not belong to them personally.  This supports the plaintiff’s case that the two gentlemen were then the de facto managers of the Tso.  Again, the defendant sought to challenge the authenticity of this document without any basis.

16.  Fourth, by a letter dated 18 January 1986, Lee Kwai Lam informed the Yuen Long District Land Office that the purported transfer of the half share in the lots in February 1982 to him personally was a mistake because the same belonged to the Tso.  He applied to rectify the mistake accordingly.  And as noted, by an assignment dated 28 October 1987, Lee Kwai Lam did assign his half share to the 1^st plaintiff and the defendant as managers of the Tso.  In fact, the defendant also wrote to the Yuen Long District Land Office in 1986 expressing his wish to cancel the memorial in respect of the succession of the half share in the lots by his father in February 1982: see the letter from the Office to the 1^st plaintiff and the defendant as managers of the Tso dated 20 February 2006.

17.  Fifth, as already alluded to above, the 1^st plaintiff and the defendant were appointed managers of the Tso.  By a notice dated 10 March 1987, a meeting of the members of the Tso was called to discuss appointment of managers and ask the defendant to transfer the half share in the Tso’s property back to the Tso.  The meeting was held on 29 March 1987.  The 1^st plaintiff and the defendant were duly appointed managers to replace Li Mi Fook.  Members present including the defendant also signed on the minutes of the meeting to confirm that all the Tso’s property belonged to them.  The appointment of the 1^st plaintiff and the defendant as managers was registered with the Yuen Long District Land Office on 28 October 1987.  Indeed, the defendant declared in the statutory declaration dated 20 February 2001 that he was appointed the manager of the Tso in 1987.

18.  Sixth, presumably in their capacity as the managers of the Tso, the 1^st plaintiff and the defendant reported to the authority the membership of the Tso: see the list of members of the Tso that he signed with the 1^st plaintiff.

19.  As to his appointment as the manager of the Tso and his subsequent conduct in that capacity, the defendant now said that he was under undue pressure and misrepresentation of his clansmen.  This is in my view none other than an afterthought made up by him.  It must be rejected. 

20.  Seventh, the Government paid compensation for the resumption of Lot Nos.2279B and 2285.  Part of the proceeds of compensation for the resumption was distributed to the members of the Tso including the defendant in June 1988.  The balance was paid into the bank account of the Tso: see the relevant income and expenditure records of the Tso.

21.  To complete the discussion, I need to deal with three further points.

22.  There is a dispute as to whether Li Mi Fook was the defendant’s grand-grandfather as alleged.  I do not think it really matters even if he was for the simple reason that, while alive, Li Mi Fook was a manager of the Tso holding the half share of the lots registered in his name as trustee of the Tso.  When eventually the same was purportedly succeeded by the defendant, the beneficial interest in the same still vested with the Tso.

23.  Next, the defendant sought to rely on an expert on Chinese customary law to support his case that the Tso did not exist and that Li Tsan Tso was a natural person.  However, as rightly conceded by his counsel, Mr Lo, that is a question of fact, upon which expert’s opinion is wholly irrelevant.

24.  Finally, Mr Lo submitted that the 2^nd and 3^rd plaintiffs, though appointed as managers in 2006 to replace the defendant and the 1^st plaintiff by the Tso, have not been so registered.  They are not entitled to sue in that capacity.  However, as rightly submitted by Mr Hung, counsel for the plaintiffs, they sue in their capacity as (a) the members of the Tso for those declaratory relief based on the Tso’s beneficial ownership in the lots; and (b) prospective managers for the declaration that they are entitled to apply to the Secretary for the Home Affairs for the cancellation of the appointment of the 1^st plaintiff and the defendant as managers of the Tso and for registration of themselves as the new managers.

Conclusion

25.  In my view, the defendant has no defence to the plaintiffs’ claims at all.  Hence I dismissed his appeal with costs.